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SEC Eyes Final Smaller Company, Mining Reporting Rules in 2018

The SEC is trying to complete smaller company and mining disclosure regulations and streamline other reporting requirements this year, a senior agency official said Jan. 23.

The Securities and Exchange Commission in 2016 proposed regulations that would require more mineral resource and exploration disclosures from the mining industry, allow additional firms to qualify as “smaller reporting companies” with more lenient disclosure demands, and scrap redundant rules as part of an ongoing agency disclosure effectiveness initiative.

The agency is likely to have a final rule for smaller company disclosures “within the next three to four months, maybe shorter,” William Hinman, director of the SEC’s Division of Corporation Finance, told a securities law conference near San Diego. Rulemaking work to streamline disclosure obligations should wrap up “in the next quarter or so” and the final mining reporting regulation is “about to come out as well,” he said.

The SEC released all three of the proposals under then-agency Chairman Mary Jo White, a Barack Obama appointee. They are in the final stage of rulemaking on the commission’s latest semi-annual regulatory agenda under Jay Clayton, President Donald Trump’s SEC chairman.

“Folks are welcome to continue to send in comments,” said Hinman, who spoke via a video feed from Washington.

Proposals’ Details

The proposed mining rule would make changes to Industry Guide 7, which the agency last updated in 1982. The proposal would add mining disclosure language to Regulation S-K and eliminate the guide.

The proposed regulation is intended to align SEC requirements with global standards and give investors more information about mining properties.

The smaller reporting company proposal would let firms with less than $250 million of public float use “scaled disclosure,” which only is available to companies at the $75 million threshold now. Firms without public float also could use the disclosures if their annual revenues are less than $100 million, instead of the current $50 million level.

Smaller companies following scaled disclosure requirements don’t have to give the SEC some financial history and corporate governance details that larger companies must include. Information such as executive risk management policies, compensation analysis, and stock performance charts aren’t required under scaled disclosure.

The plan to streamline disclosure requirements is aimed at rules that overlap with generally accepted accounting principles issued by the Financial Accounting Standards Board.

“I think there’s a lot of underbrush to be cleared,” Hinman told the Northwestern University Pritzker School of Law’s Securities Regulation Institute in Coronado, Calif.